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  • Table of Contents
    • Overview
      • Why Analyze Securities?
      • Technical Analysis
      • Fundamental Analysis
      • Random Walk vs. Non-Random Walk
      • Asset Allocation and Diversification
      • John Murphy's 10 Laws of Technical Trading
      • John Murphy's "Charting Made Easy" eBook
      • Technical Analysis 101
        • TA 101 – Part 1
        • TA 101 – Part 2
        • TA 101 – Part 3
        • TA 101 – Part 4
        • TA 101 – Part 5
        • TA 101 – Part 6
        • TA 101 – Part 7
        • TA 101 – Part 8
        • TA 101 – Part 9
        • TA 101 – Part 10
        • TA 101 – Part 11
        • TA 101 – Part 12
        • TA 101 – Part 13
        • TA 101 – Part 14
        • TA 101 – Part 15
        • TA 101 – Part 16
        • TA 101 – Part 17
      • Irrational Exuberance
      • Cognitive Biases
      • Arthur Hill on Goals, Style and Strategy
      • Arthur Hill on Moving Average Crossovers
      • Multicollinearity
      • "The Trader's Journal" by Gatis Roze
        • Stage 1: Money Management
        • Stage 2: Business of Investing
        • Stage 3: The Investor Self
        • Stage 4: Market Analysis
        • Stage 5: Routines
        • Stage 6: Stalking Your Trade
        • Stage 7: Buying
        • Stage 8: Monitoring Your Investments
        • Stage 9: Selling
        • Stage 10: Re-Examine, Refine, Re-Enhance
        • Additional Reading
      • Bob Farrell's 10 Rules
      • Richard Rhodes' Trading Rules
      • Donchian Trading Guidelines
      • Why and How To Use Correlation
    • Chart Analysis
      • What Are Charts?
      • Support & Resistance
      • Trend Lines
      • Gaps and Gap Analysis
      • Introduction to Chart Patterns
      • Chart Patterns
        • Broadening Top or Megaphone Top
        • Double Top Reversal
        • Double Bottom Reversal
        • Head and Shoulders Top
        • Head and Shoulders Bottom
        • Falling Wedge
        • Rising Wedge
        • Rounding Bottom
        • Triple Top Reversal
        • Triple Bottom Reversal
        • Bump and Run Reversal
        • Flag, Pennant
        • Symmetrical Triangle
        • Ascending Triangle
        • Descending Triangle
        • Rectangle
        • Price Channel
        • Measured Move—Bullish
        • Measured Move—Bearish
        • Cup With Handle
      • Chart Types
        • Arms CandleVolume
        • CandleVolume
        • Elder Impulse System
        • EquiVolume
        • Heikin-Ashi Candlesticks
        • Kagi Charts
        • Renko Charts
        • Three Line Break Charts
        • MarketCarpets
        • Relative Rotation Graphs (RRG Charts)
        • Seasonality Charts
        • Yield Curve
      • Candlestick Charts
        • Introduction to Candlesticks
        • Candlesticks and Traditional Chart Analysis
        • Candlesticks and Support
        • Candlesticks and Resistance
        • Candlestick Bullish Reversal Patterns
        • Candlestick Bearish Reversal Patterns
        • Candlestick Pattern Dictionary
      • Point and Figure Charts
        • Point and Figure Basics
          • Introduction to Point & Figure Charts
          • Point & Figure Scaling and Timeframes
          • P&F Trend Lines
        • Classic Patterns
          • P&F Bullish Breakouts
          • P&F Bearish Breakdowns
          • P&F Signal Reversed
          • P&F Catapults
          • P&F Triangles
          • P&F Bull & Bear Traps
        • P&F Price Objectives
          • P&F Price Objectives: Breakout and Reversal Method
          • P&F Price Objectives: Horizontal Counts
          • P&F Price Objectives: Vertical Counts
        • Point & Figure Indicators
        • P&F Scans and Alerts
          • P&F Pattern Alerts
      • Chart Annotation Tools
        • Andrews' Pitchfork
        • Stock Market Cycles
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        • Quadrant Lines
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        • Speed Resistance Lines
    • Technical Indicators & Overlays
      • Introduction to Technical Indicators and Oscillators
      • Technical Indicators
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        • Alligator Indicator
        • Aroon
        • Aroon Oscillator
        • ATR Bands
        • ATR Trailing Stops
        • Average Directional Index (ADX)
        • Average True Range (ATR) and Average True Range Percent (ATRP)
        • Balance of Power (BOP)
        • Bollinger BandWidth
        • %B Indicator
        • Chaikin Money Flow (CMF)
        • Chaikin Oscillator
        • Chande Trend Meter (CTM)
        • CMB Composite Index
        • Commodity Channel Index (CCI)
        • ConnorsRSI
        • Coppock Curve
        • Correlation Coefficient
        • DecisionPoint Price Momentum Oscillator (PMO)
        • Detrended Price Oscillator (DPO)
        • Distance From Highs
        • Distance From Lows
        • Distance To Highs
        • Distance To Lows
        • Distance From Moving Average
        • Ease of Movement (EMV)
        • Force Index
        • Gopalakrishnan Range Index
        • High Low Bands
        • High Minus Low
        • Highest High Value
        • Linear Regression R2
        • Lowest Low Value
        • Mass Index
        • MACD (Moving Average Convergence/Divergence) Oscillator
        • MACD-Histogram
        • MACD-V
        • MACD-V Histogram
        • Median Price
        • Money Flow Index (MFI)
        • Negative Volume Index (NVI)
        • On Balance Volume (OBV)
        • Percentage Price Oscillator (PPO)
        • Percentage Volume Oscillator (PVO)
        • Performance Spread
        • Price Relative/Relative Strength
        • Pring's Know Sure Thing (KST)
        • Pring's Special K
        • Rate of Change (ROC)
        • Relative Strength Index (RSI)
        • Relative Volume (RVOL)
        • RRG Relative Strength
        • StockCharts Technical Rank
        • Slope
        • Standard Deviation (Volatility)
        • Stochastic Oscillator (Fast, Slow, and Full)
        • StochRSI
        • Traffic Light
        • TRIX
        • True Range
        • True Strength Index
        • TTM Squeeze
        • Typical Price
        • Ulcer Index
        • Ultimate Oscillator
        • Vortex Indicator
        • Weighted Close
        • Williams %R
      • Technical Overlays
        • Anchored VWAP
        • Bollinger Bands
        • Chandelier Exit
        • Double Exponential Moving Average (DEMA)
        • Hull Moving Average (HMA)
        • Ichimoku Cloud
        • Kaufman's Adaptive Moving Average (KAMA)
        • Keltner Channels
        • Linear Regression Forecast
        • Linear Regression Intercept
        • Moving Averages—Simple and Exponential
        • Moving Average Ribbon
        • Moving Average Envelopes
        • Parabolic SAR
        • Pivot Points
        • Price Channels
        • Triple Exponential Moving Average (TEMA)
        • Volume-by-Price
        • Volume-Weighted Average Price (VWAP)
        • ZigZag
    • Market Indicators
      • Introduction to Market Indicators
        • Market Indicator Dictionary
      • Advance-Decline Line
      • Advance-Decline Percent
      • Advance-Decline Volume Line
      • Advance-Decline Volume Percent
      • Arms Index (TRIN)
      • Bullish Percent Index (BPI)
      • DecisionPoint Intermediate-Term Breadth Momentum Oscillator (ITBM)
      • DecisionPoint Intermediate-Term Volume Momentum Oscillator (ITVM)
      • DecisionPoint Swenlin Trading Oscillator (STO)
      • High-Low Index
      • High-Low Percent
      • McClellan Oscillator
      • McClellan Summation Index
      • Net New 52-Week Highs
      • Percent Above Moving Average
      • Pring's Bottom Fisher
      • Pring's Diffusion Indicators
      • Pring's Inflation and Deflation Indexes
      • Pring's Net New High Indicators
      • Put/Call Ratio
      • Record High Percent
      • Volatility Indices
    • Market Analysis
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      • Sector Rotation Analysis
      • Intermarket Analysis
      • The DecisionPoint Chart Gallery
      • DecisionPoint Rydex Asset Analysis
      • Wyckoff Analysis Articles
        • Wyckoff Market Analysis
        • Wyckoff Stock Analysis
        • The Wyckoff Method: A Tutorial
      • Elliott Wave Analysis Articles
        • Introduction to Elliott Wave Theory
        • Identifying Elliott Wave Patterns
        • Guidelines for Applying Elliott Wave Theory
    • Trading Strategies & Models
      • DecisionPoint Trend Model
      • Trading Strategies
        • Bollinger Band Squeeze
        • CCI Correction
        • CVR3 VIX Market Timing
        • Faber's Sector Rotation Trading Strategy
        • Gap Trading Strategies
        • Harmonic Patterns
        • Hindenburg Omen
        • Ichimoku Cloud Trading Strategies
        • The 'Last' Stochastic Technique
        • MACD Zero-Line Crosses With Swing Points
        • Moving Average Trading Strategies
          • Finding Support and Resistance in Moving Averages
          • Guppy Multiple Moving Average: An MA Ribbon Designed to Tip the Market’s Hand
          • How To Trade Price-to-Moving Average Crossovers
          • Trading the Bounce: Finding Support and Resistance in Moving Averages
          • Trading the Death Cross
          • Trading Using the Golden Cross
          • Using the 5-8-13 EMA Crossover for Short-Term Trades
        • Moving Momentum
        • Narrow Range Day NR7
        • Percent Above 50-day SMA
        • Percent B Money Flow
        • The Pre-Holiday Effect
        • RSI(2)
        • Six-Month Cycle MACD
        • Slope Performance Trend
        • Stochastic Pop and Drop
        • Swing Charting
        • Trend Quantification and Asset Allocation
    • Index & Market Indicator Catalog
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      • StockCharts AD Percent
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On this page
  • What Are Renko Charts?
  • Construction and Characteristics of Renko Charts
  • Close Versus High-Low Range
  • Fixed Value versus ATR
  • Trends, Support, and Resistance
  • The Takeaway
  • Renko Charts In SharpCharts
  • Frequently Asked Questions
  • Further Study

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  1. Table of Contents
  2. Chart Analysis
  3. Chart Types

Renko Charts

PreviousKagi ChartsNextThree Line Break Charts

Last updated 10 months ago

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What Are Renko Charts?

Renko charts originated in Japan. The charts ignore time and focus solely on price changes that meet a minimum requirement. In this regard, these charts are similar to . Instead of X-and O-Columns, Renko charts use price “bricks,” representing a fixed price move. These bricks are sometimes called “blocks” or “boxes.” They move up or down in 45-degree lines with one brick per vertical column. Bricks for upward price movements are hollow, while bricks for falling price movements are filled with a solid color (typically black).

Construction and Characteristics of Renko Charts

Renko charts are based on bricks with fixed values that filter out smaller price movements. A regular bar, line, or candlestick chart has a uniform date axis with equally spaced days, weeks, and months. This is because there is one data point per day or week. Renko charts ignore the time aspect and only focus on price changes.

If the brick value is set at 10 points, a move of 10 points or more is required to draw another brick. Price movements less than 10 points would be ignored, and the Renko chart would remain unchanged.

For example, if you're using the S&P 500 10-point Renko chart and the S&P 500 advanced nine points (1840 to 1849), you wouldn't see a new Renko brick drawn on the chart. If the S&P 500 advanced to 1850 the next day, a new Renko brick would be drawn because the entire move was at least 10 points. This brick would extend from 1840 to 1850 and be hollow or white in this example. Alternatively, if the S&P 500 declined from 1840 to 1830, a new Renko brick would be drawn, and it would be solid or black.

The two charts below cover a six-month timeframe. The Renko chart sports an irregular date axis. The price action is less choppy because the S&P 500 Renko chart ignores price moves that are less than 10 points. It remains unchanged until there is a move of at least 10 points.

Close Versus High-Low Range

Renko charts can be based on closing prices or the high-low range using the “field” setting in SharpCharts. Closing price means there is one data point per period and less volatility. The high-low range puts two data points into play and increases the fluctuations, which results in added bricks.

The examples below show Renko charts for the S&P 500; the box size is 10 points for both. The first chart is based on closing prices, and the second is based on the high-low range. Notice that the Renko chart based on the high-low range fluctuates more than the close-only Renko chart.

Fixed Value versus ATR

In contrast to fixed price bricks, using ATR values results in fluctuating brick sizes. The default ATR is based on 14 periods, and the ATR fluctuates over time. The brick size is based on the ATR value when the chart is created. Should the ATR value change the next day, the new ATR value will be used to set the brick size. Also note that ATR values are based on standard charts, such as close-only, bar, and candlestick. These charts have one data point per period and a uniform x-axis (date axis). The ATR value shown on these charts can differ from the ATR brick value on a Renko chart due to rounding issues.

The next two examples show how the ATR value changes when the ending chart date changes. The chart below ends on June 10, and the ATR value is 12.05, which is the value for each Renko brick.

The second example shown in the chart below ends on April 15, and the ATR value is 20.55, which is the value for each Renko brick. Notice how the brick value changed as the ATR value changed. The bricks on April 15 have a much higher value than those on June 10.

Trends, Support, and Resistance

White bricks form when prices rise a certain amount, and black bricks form when prices decline a certain amount.

Troughs can mark support levels, and peaks can mark resistance levels. You can also look for a two-brick reversal to signal a trend change. Notice how the index fell with five black bricks in August and again in September-October. These declines looked like falling flags. A reversal occurred when two white bricks formed and broke above the short-term resistance level. Chartists can also apply the Fibonacci Retracements Tool to Renko charts.

The Takeaway

Like their Japanese cousins (Kagi and Three Line Break), Renko charts filter the noise by focusing exclusively on minimum price changes. Renko bricks are not added unless price changes by a specific amount. As with Point & Figure charts, it is easy to spot important highs and lows, and identify key support and resistance levels.

With this information, chartists can identify uptrends with higher highs and higher lows or downtrends with lower lows and lower highs. As with all charting techniques, chartists should employ other technical analysis tools to confirm or refute their findings on Renko charts.


Renko Charts In SharpCharts

Chartists can create Renko charts by going to the “Chart Attributes” section and selecting Renko as the chart “Type”. This section is just under the SharpChart on the left side. Users will then be able to choose between points or ATR, and then set the parameters for these two options in the next box.

The “ATR” setting uses the Average True Range indicator from the symbol's underlying bar chart to determine an “Automatic” value for the Renko chart's box size. Note: This ATR value might change as prices change which can cause the Renko chart to change significantly whenever it is updated.

The “field” can be set at close or high-low range. Chartists looking for more sensitivity can choose the high-low range. Chartists looking to focus on end-of-day price data can choose the close. The brick colors can also be changed using the “up color” and “down color” drop down menus just below the SharpChart.



Note: If the phrase “AT LIMIT” appears at the top of a chart, it means that the box size specified would result in a chart that is too large for us to display. In that case, we increase the box size to the smallest size we can successfully display and add the “AT LIMIT” message to the top of the chart.


Frequently Asked Questions

Why are the Renko bricks changing on my chart?

If you are using the ATR box size, the box size is computed automatically. However it may change during the day, so the chart may change along with it.


Further Study

As the name implies, this book goes beyond candlesticks to show chartists other technical analysis techniques that originated in Japan. Nison devotes an entire chapter to Renko charts; additionally, he covers Three Line Break charts, Kagi charts and explains how Japanese traders use moving averages.

Chartists can use the “box” settings to set brick size as a specific value or as the (ATR). A specific point value means brick size will remain constant even as new data is incorporated into the chart. In other words, new price data is added every trading day, and the brick size will remain constant. The two charts above have a fixed value, and each brick represents ten points.

The image below shows a daily S&P 500 chart with 10-point bricks and a 10-period . Note that a 10-period moving average calculation is based on the last 10 Renko values, not the last 10 trading days. An indicator on a Renko chart is based on Renko values and will differ from that on a bar chart. Chartists can typically use shorter moving averages on Renko charts because smaller price movements have been filtered out.

for a live example.

Steve Nison

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Traditional bar chart with a uniform data axis.
Renko chart for the same time frame as the bar chart but note the irregular date axis and less choppy price action.
Renko chart based on closing prices.
Renko chart based on the high-low range.
Traditional bar chart with the 14-period ATR.
Renko brick with ATR for box size.
SharpChart settings for Renko charts.
Renko chart from StockCharts.com based on closing prices.
Renko charts from StockCharts.com based on the high-low range.
SharpCharts settings for Renko charts using StockCharts.com